A Company Is Deciding Between 2 Foreign Firms to Provide

question 46

Essay

A company is deciding between 2 foreign firms to provide its call center services.A factor-rating method is used.Factors are rated on a scale of 1-10,with 10 being the best score.
A: If the factors are weighted equally (respective weights of .3333),which firm is preferred?
B: Suppose a consultant recommended that Factor 2 be twice as important as Factor 1,while Factor 3 should be four times as important as Factor 1.Which firm is best now using a weighted method? (Round your weights to the nearest four decimal places. )

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Definitions:

Actual Expenses

The real, documented expenditures incurred by an individual or business.

Direct Expenses

Costs that can be directly traced to producing specific goods or services and can vary with the level of production.

Indirect Expenses

Expenses that cannot be directly linked to the production of goods or services, such as administrative salaries and utilities.

Contribution Margin

The Contribution Margin represents the amount of revenue from sales that exceeds variable costs, contributing to covering fixed costs and generating profit.